Trump announces trade deal with EU following months of negotiations
Introduction & Market Context
Spanish pharmaceutical company Faes Farma SA (BME:FAE) presented its Q1 2025 financial results on May 6, showcasing strong revenue growth across all business segments while facing some profitability challenges. The company’s shares closed at €4.34, down 0.69% on the day of the presentation, as investors digested the mixed results.
Faes Farma continues to execute its growth strategy with emphasis on international expansion, particularly in Latin America, while advancing its R&D pipeline and pursuing strategic acquisitions. The company recently unveiled its new Strategic Plan for 2025-2030, signaling its long-term vision and growth ambitions.
Quarterly Performance Highlights
Faes Farma reported total income of €153.0 million for Q1 2025, representing a robust 9.7% increase compared to the same period last year. This growth was primarily driven by the company’s three strategic molecules, which collectively grew by 14.5% to reach €66.7 million.
As shown in the following key financial metrics:
The pharmaceutical segment, which accounts for 89% of total income, grew by 8% to €136.3 million. Meanwhile, the Animal Nutrition and Health division delivered an impressive 29% growth, reaching €16.7 million.
Despite the strong top-line performance, profitability metrics showed some pressure. EBITDA declined by 4.1% to €39.3 million, while net profit fell by 6.8% to €28.4 million. However, when excluding extraordinary costs related to the Derio facility, adjusted EBITDA increased by 3.0% to €42.2 million.
Detailed Financial Analysis
A closer examination of Faes Farma’s business segments reveals growth across all areas, with particularly strong performance in international markets and licensing.
The company’s portfolio is well-balanced, with the top three strategic molecules accounting for 44% of total income, as illustrated in this breakdown:
Among the strategic molecules, Bilastine led the way with €44.3 million in sales (+15%), followed by Calcifediol at €16.5 million (+8%) and Mesalazine at €5.9 million (+39%). The strong performance of these key products underscores the success of Faes Farma’s focused product strategy.
The following chart highlights the performance of these critical molecules:
Geographically, Latin America emerged as a clear growth engine for Faes Farma, with sales increasing by 19% to reach €24.5 million. This contrasts with a 7% decline in other international markets, emphasizing the strategic importance of the company’s LATAM expansion.
The licensing business also performed well, growing by 12% to €39.5 million, with Bilastine licenses up 5% and other licenses surging by 44%.
The comprehensive profit and loss statement reveals the financial dynamics at play:
The company attributed the pressure on margins to changes in product mix, particularly from the new product line at the Farm Faes ISF factory, as well as increased investments in sales force expansion in LATAM and Gulf subsidiaries and enhanced R&D activities.
Strategic Initiatives
Faes Farma highlighted several important strategic developments during the quarter:
1. R&D advancements: The company secured approval for pediatric bilastine in Europe for children under 6 years and submitted the dossier for mesalazine 1.5 mg tablets to European regulatory authorities in April. Additionally, it completed the clinical phase of bioequivalence for three clinical studies.
2. M&A activity: Faes Farma signed a contract (SPA) for the acquisition of Laboratorios Edol, furthering its expansion strategy.
3. Strategic planning: The company presented its new Strategic Plan for 2025-2030 and defined a new organizational culture for the Faes Pharma Group.
4. Shareholder returns: Faes Farma paid its first 2024 interim dividend of €12 million in January.
5. Capital investments: The company completed investments in Derio and ISF without requiring external financing.
Forward-Looking Statements
Looking ahead, Faes Farma’s Q1 2025 performance appears to be tracking in line with its full-year outlook. The company has projected annual income growth of 8-10% (Q1 actual:+9.7%) and adjusted EBITDA growth of 3-5% (Q1 actual:+3.0%).
The business areas trending positively across all segments suggest continued momentum:
Management expressed confidence in the company’s growth trajectory, emphasizing that the double-digit income growth is at the high end of guidance. The company also acknowledged that increased expenses are aligned with the priorities of its strategic plan, particularly the acceleration of its sales force in LATAM and Gulf subsidiaries and boosted R&D activities.
While facing some margin pressure in the short term, Faes Farma appears well-positioned to leverage its strong product portfolio and geographic expansion to drive sustainable growth. Investors will be watching closely to see if the company can maintain its revenue momentum while addressing the profitability challenges in the coming quarters.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.